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Petitioner continued to perform services as a minister in
the year 1985. Petitioners' joint individual income tax return
for the year 19853 includes a Schedule SE on which the box
following line 2, Part I, is checked, indicating that "you are
exempt from self-employment tax on your earnings as a minister
* * * because you filed Form 4361." The Schedule SE for 1985
lists only the net profit amount reported on a Schedule C and
excludes over $10,000 in payments to petitioner from Omaha
Victory Church for his services as a minister.
In the early part of 1991, petitioners' Federal income tax
returns for tax years 1989 and 1990 came under examination by
respondent. During this examination there arose a dispute
between petitioners and respondent over whether petitioner had on
file with respondent a valid exemption Form 4361 with respect to
petitioner's earnings from his ministry.
On February 4, 1992, respondent received and filed a Form
4361 dated September 19, 1991, that petitioners had submitted.
Petitioners insisted that they had previously attached a Form
4361 to their 1985 tax return and advised respondent that the
filing of the "new" exemption form was merely a "protective
3Respondent entered into evidence a certified copy of Form
4340, Certificate of Assessments and Payments, for petitioners'
Form 1040 for the year 1985. Respondent's record of assessments
and payments shows the filing date for the 1985 return to be
June 9, 1986. An addition to tax due to late filing was assessed
and paid on July 11, 1986.
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